UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 09-4756

UNITED STATES OF AMERICA,

Plaintiff - Appellee,
v.
JODY ALTON SMITH, SR.,
Defendant - Appellant.

Appeal from the United States District Court for the Western
District of Virginia, at Roanoke.
James C. Turk, Senior
District Judge. (7:07-cr-00079-jct-1)

Argued:

September 23, 2011

Before AGEE and

Circuit Judge.

WYNN,

Circuit

Decided:

Judges,

and

December 1, 2011

HAMILTON,

Senior

Affirmed by unpublished per curiam opinion.

ARGUED: Gilbert Kenneth Davis, GILBERT K. DAVIS & ASSOCIATES,

LLC, Fairfax, Virginia, for Appellant.
Thomas Ernest Booth,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee. ON BRIEF: Timothy J. Heaphy, United States Attorney,
Sharon Burnham, Assistant United States Attorney, OFFICE OF THE
UNITED STATES ATTORNEY, Roanoke, Virginia; Lanny A. Breuer,
Assistant Attorney General, Greg D. Andres, Acting Deputy
Assistant Attorney General, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.

PER CURIAM:
Jody Alton Smith, Sr. (Smith) was convicted of numerous
charges

arising

fraudulent
funds.

from

receipt

his

of

illegal

Social

liquor

Security

operation

and

Administration

his

(SSA)

He was sentenced to forty-eight months imprisonment.

On appeal, three issues are presented: (1) whether the district

court erred in denying Smiths motion to suppress; (2) whether
there is sufficient evidence in the record to support Smiths
conviction

for

the

fraudulent

receipt

of

SSA

funds;

and

(3)

whether the district court erred in calculating the tax loss for
purposes of sentencing.

We affirm.

I
In this part of the opinion, we first set forth the legal
landscape and facts concerning Smiths illegal liquor operation,
followed

by

the

legal

landscape

fraudulent receipt of SSA funds.

and

facts

concerning

his

We then set forth the relevant

procedural history.
A
1
Any

person

can

engage

in

the

business

of

producing

distilled spirits by obtaining a permit from the Alcohol & Trade

Tax & Trade Bureau (TTB).
business

of

distilling

27 U.S.C. 203(b).
spirits
3

is

required

A person in the
to,

among

other

things, register the still or distilling apparatus, 26 U.S.C.

5179, provide a bond covering the operation of the still or
distilling apparatus, id. 5173, and pay the requisite taxes,
id.

5001(a)(1).

Failure

to

register

the

still,

post

the

appropriate bond, or pay the requisite taxes can result in fines

and criminal penalties, id. 5601.
The federal government imposes a tax on distilled spirits
either produced in or imported into the United States.
5001(a)(1).
distilled
States.

The

spirits
Id.

tax

is

produced

$13.50
in

or

on

each

proof

imported

into

Id.

gallon
the

of

United

A proof gallon of distilled spirits is a gallon

which contains at least one half of its volume in ethyl alcohol.

Id. 5002(a)(10).
spirits

are

The tax attaches as soon as the distilled

produced.

Id.

5001(b).

The

distiller

is

responsible for paying the tax, id. 5005(a), which is payable

to the TTB, id. 5061.

The taxes owed must be paid at the time

the distilled spirits are removed from the bonded premises, id.

5006(a)(1) & 5007. 1

2
Smith,

with

the

help

of

several

others,

ran

an

illegal

liquor operation on an eight acre piece of property (the Halifax

1

The Commonwealth of Virginia imposes its own tax on

distilled spirits. The tax equals 20% of the sales price. Va.
Code Ann. 4.1-234(B).

Property or

the

Property)

in

Halifax

County,

Virginia.

The

Property had three structures on it: a single-wide trailer; a

barn converted into a storage shed; and a building, which housed
a still.

The Property also had four video surveillance cameras

which were used to monitor the Property.

In the summer of 2005, federal and state law enforcement
agents began to investigate Smiths operation after receiving
information

from

confidential

informants.

Eventually,

investigation centered on the Halifax Property.

the

Land records

showed that Dale Shrock sold the property to Danny Davis on

January 17, 2003 for $20,000.00.

Davis put 10% down, and Shrock

financed the remainder through a deed of trust and a promissory

note.

In March 2004, Davis applied for building permits and

other

services

on

the

land,

giving

the

business

address

and

phone number of a business owned by Smith called Smiths Auto

Sales.

With the assistance of Patricia Waldron, an employee of

Smiths

Auto

Sales,

Davis

requested

and

received

$112.50

refund for renewal of septic system from the Halifax County

Health Department.

(J.A. 460).

The refund was sent to the

business address of Smiths Auto Sales.

On April 19, 2004, an electrical service account for the
Halifax Property was established in the name of Rhonda Hall.
The

account

was

transferred

to

companion, on September 28, 2004.

5

Margaret

Smith,

Smiths

From April 2004 to December

2004, electrical use at the Property was minimal.

(J.A. 773).

In December 2004, electrical use at the Property almost tripled.

Electrical
(J.A. 773).

use

stayed

consistently

high

through

May

2006.

In January 2006, electrical use was more than eight

times the use in November 2004.

In

March

2005,

Margaret

Property from Davis.

Smith

purchased

the

Halifax

According to Margaret Smiths accountant,

Cynthia Hudgins, the purchase price was $11,568.00, which was

the remaining balance on the promissory note.
In early 2006, law enforcement agents drove by the Halifax
Property one evening and heard sounds consistent with liquor
production.

The

law

enforcement

agents

did

not

enter

the

Property because they saw video surveillance cameras there.

As

a result, on March 3, 2006, the agents installed a surveillance

video recorder on land next to the Halifax Property to record
the

persons

and

vehicles

arriving

and

leaving

the

Property.

From March 3, 2006 to April 18, 2006, the surveillance video

recorded

Smith

and

Halifax Property.

several

others

arriving

and

leaving

the

On April 18, 2006, the law enforcement agents

discovered that their surveillance video recorder was missing.

On

May

12,

2006,

search

warrant

was

executed

at

the

Halifax Property.

In the building, the law enforcement agents

found

dismantled

partially

still,

four

1,200

gallon

still

pots, approximately 119 empty 100-pound bags of sugar, six full

6

100-pound bags of sugar, some bags of barley, numerous bags of

yeast,

and

other

things

used

in

the

distillery

process,

including liquor jugs, jug caps, fueling oil, an oil heater,

cooling boxes, proofing barrels, and a sump pump.
On May 18, 2006, a search warrant was executed at Smiths
residence.

Numerous

trafficking

were

hydrometers,
currency.
that

fit

building

items

found,

consistent

including

thermometer,

and

with

liquor

$70,000.00

illegal

jugs,
in

liquor

jug

United

caps,
States

The law enforcement agents also found a set of keys

the
on

locks
the

at

the

Halifax

Property.

In

Property,

Smiths

including

wallet,

the

the
law

enforcement agents found a business card for CKS Packaging in

Graham, North Carolina, and a handwritten note stating NEPCO,
Northern Plastic Corporation, 1902 New Butler Road, New Castle,
Pennsylvania.

(J.A. 918).

The handwritten note also states

Cap style: 38mm tamper-evident caps.

(J.A. 918).

The law

enforcement agents found a time-lapse video recorder, and they

also found camera mounting equipment that had the same serial
numbers as the video surveillance cameras found at the Halifax
Property. 2

In a trailer located on land owned by Smith that was

Greg Thomas, an employee of State Electronics in

Collinsville, Virginia sold Smith the time-lapse video recorder,
the four video surveillance cameras, and the camera mounting
equipment in January 2005.
The receipt for the sale indicates
(Continued)
7

adjacent
large

to

his

plastic

residence,
containers

the

law

similar

enforcement
to

the

agents

proofing

found

barrels

recovered on the Halifax Property.

Also on May 18, 2006, a search warrant was executed at
Smiths

Auto

interviewed

Sales.
by

Bart

During

the

McEntire,

search,

an

ATF

Margaret
agent.

Smith

was

During

the

interview, Margaret Smith stated that she agreed to take over

Davis payments on the promissory note because he wanted to get
out from under the loan he had on the Halifax Property.
516).

(J.A.

According to Margaret Smith, she rented the property as a

hunt club to Mr. Jones.

(J.A. 516).

Margaret Smith had no

information on Mr. Jones whatsoever, except that about every

three months, she would meet him and collect $1,200.00 in rent.
(J.A. 516).

Out of the rent received, Margaret Smith paid the

monthly electric bill and the property taxes on the Property. 3

At

trial,

the

government

built

its

case

around

the

testimony of numerous witnesses, including Smiths codefendant,

Jarman Johnson, who testified on behalf of the government.

The

governments evidence established that, from November 2005 to

these items were sold to the Rock Creek Hunting Club.

595).
3

(J.A.

According to Waldron, on one occasion, Smith paid the

property taxes for the Halifax Property.

April 2006, under a variety of names (including Mays, Mays

Deli,

and

Mays

Diner,

(J.A.

1395)),

Smith

purchased

in

twenty-two transactions a total of 124,100 pounds of sugar for

$58,402.00 from William R. Hill & Company in Richmond, Virginia.
The evidence further established that, from mid-2005 to April
2006, John Taylor purchased liquor from Smith on approximately
ten occasions, buying fifty to sixty cases of liquor each time.
Smith initially charged Taylor $80.00 per case, but increased
the price to $90.00 to $95.00 per case when gas prices started
to rise.
Johnson,
testified

who

that

he

was

driver

purchased

and

sugar

still
from

hand

William

for
R.

Company, signing receipts in the name of James Jones.

632).

Smith,
Hill

&

(J.A.

In February 2006, accompanied by Johnson, Smith drove a

tractor trailer to CKS Packaging in Haw River, North Carolina

and purchased 12,000 liquor jugs. 4

On April 4, 2006, Smith,

According to Debbie Evans, a sales associate with CKS

Packaging, the phone order for the liquor jugs was placed by a
Mr. Jones.
(J.A. 582).
During the phone order, Crossroads
Dairy was the name of the billing address given by Mr. Jones.
(J.A. 581). At the time of pickup, no sales tax identification
number was provided to CKS Packaging. Evans allowed the sale to
proceed because a fax number for Crossroads Dairy was provided
and she received assurances that a sales tax identification
number would be sent by fax.
Evans never received a sales tax
identification number for the sale.

accompanied by Johnson, purchased a sump pump for the still at a

Lowes in Rocky Mount, North Carolina.
At the still, Johnson worked with Smith and others.

To

make a batch of liquor, Johnson would put eleven 100-pound bags

of sugar in each of four still pots, which yielded twenty-five
to thirty cases of liquor per pot.
liquor jugs.

Each case consisted of six

Afterwards, Johnson would load the liquor jugs

into distribution trucks.

B
1
The

SSA

issues

disability

qualifying disabled persons.

insurance

payments

to

certain

In order to qualify for disability

insurance benefits, a person must establish that he suffers from

a disability, which is defined as the inability to engage in
any

substantial

gainful

activity

by

reason

of

any

medically

determinable physical or mental impairment which can be expected

to result in death or which has lasted or can be expected to
last for a continuous period of not less than twelve months.
42 U.S.C. 423(d)(1)(A).

If disability benefits are awarded,

the SSA must periodically conduct continuing disability reviews.

20 C.F.R. 404.1594.
A recipient of disability insurance benefits who returns to
work first enters a trial work period.
trial

work

period

is

period
10

to

Id. 404.1592(a).

give

the

recipient

A
the

opportunity to test his ability to work for up to nine months

within a consecutive sixty-month period without fear of losing
his

benefits.

Id.

The

nine-month

period

need

not

be

consecutive, id., and the trial work performed by the recipient

may be legal or illegal, id. 404.1592(b).

For a self-employed

worker, work will be considered trial work if the self-employed

worker works more than eighty hours a month or his net monthly
earnings

pass

certain

threshold.

Id.

404.1592(b)(2)(ii).

However, all recipients of disability insurance benefits must

notify the SSA if his condition improves, he returns to work, or
Id. 404.1588.

he increases the amount of his work.

2

In 1999, Smith contacted the SSA to apply for disability

insurance

benefits.

with

SSA,

the

Richard

talked

to

Lowery,

Smith

application process to him.

by

claims

phone

and

representative
explained

the

Lowery expressly told Smith that he

had to be sufficiently disabled such that he could not work, and

that if he returned to work, that would affect the amount of his
payments.

Thereafter,

Lowery

sent

disability

insurance

benefits application form to Smith.

Smith

submitted

written

application

for

disability

insurance benefits to the SSA based on his claim that he could

not work due to his disabilities.

11

Smiths application contained

specific

provision

that

he

had

to

notify

condition improved or he returned to work.

the

SSA

if

his

Smith stated that

his disabilities had caused him to surrender his car business to

his

daughter

in

1998.

In

2001,

the

SSA

approved

Smiths

application and awarded him $27,391.75.

In 2003, the SSA sent Smith a form entitled Report of
Continuing

Disability

to

determine

whether

eligible for disability insurance payments.

Smith

remained

(J.A. 735).

Smith

completed and signed the form, and returned it to the SSA.

On

the form, Smith checked a box indicating that he had not worked.
He also stated that he was still disabled due to shoulder, back,
and leg problems.

Smith explained that he was doing less due to

pain and that he did very little walking or moving around.

In September 2003, by letter, the SSA notified Smith that
he would receive disability insurance payments in the future.
The letter also stated that a recipient of SSA payments had to
notify the SSA if his condition improved or he returned to work.
In August 2006, Antonio Watkins, a claims representative
with the SSA, received an anonymous report that Smith was selfemployed.

Watkins sent a letter to Smith and, after receiving

no reply, tried to call Smith several times.

Finally, Watkins

reached Smith by telephone and was informed that Smith was not
working and that his back problems had gotten worse.
to

Watkins

letter,

Smith

reiterated
12

that

he

had

Referring
not

worked

since he had become disabled.

Based on Smiths replies, the SSA

continued to send disability insurance payments to Smith.

Watkins testified that, even if Smith had been entitled to
collect disability insurance payments while working in a trial
work period, Smith was overpaid by more than $10,000.00 because
a trial work period is limited to nine months, but Smith worked
for more than nine months, and his actual income would have
caused

substantial

reduction

in

his

disability

insurance

payments.
C
On March 13, 2008, a federal grand jury sitting in the
Western District of Virginia charged Smith and six others in a
thirty-two count superseding indictment.
thirty-one of the thirty-two counts.

Smith was charged in

In Count One, Smith was

charged with conspiracy to produce untaxed liquor, 18 U.S.C.

371 (Count One).

In Counts Two through Eight, he was charged

with interstate travel or communication to promote trafficking

in untaxed liquor, id. 1952(a)(3).
charged

with

5601(a)(1),
5601(a)(4).

possession
and,

in

of

Count

an

In Count Nine, he was

unregistered

Ten,

failure

still,

to

post

26

U.S.C.

bond,

id.

In Count Eleven, Smith was charged with unlawful

production of distilled spirits, id. 5601(a)(8), and, in Count

Twelve, he was charged with fraudulent receipt of government
(SSA) funds, 18 U.S.C. 641.

Smith was charged with conspiracy

13

to commit money laundering in Count Thirteen, id. 1956(h),

and, in Counts Fourteen through Twenty-Eight, he was charged
with money laundering, id. 1956(a)(1)(A)(i).

In Count Twenty-

Nine, Smith was charged with perjury, id. 1623, and, in Count
Thirty-One,

he

1503(a).

was

charged

Count

with

Thirty-Two

tampering, id. 1532(c)(2).

obstruction
charged

of

Smith

justice,
with

id.

witness

The indictment also contained a

forfeiture allegation.
Prior to trial, Smith pleaded guilty to the obstruction of
justice

count

dismissed,

on

(Count
the

Thirty-One),

governments

count (Count Thirty-Two).

was

convicted

of

the

and

motion,

the
the

district

witness

court

tampering

At the conclusion of the trial, Smith

remaining

counts

pending

against

him.

Prior to sentencing, the district court granted Smiths motion

for

judgment

of

acquittal

on

the

counts

related

laundering (Counts Thirteen to Twenty-Eight).

the

district

imprisonment.

court

sentenced

Smith

to

to

money

At sentencing,

forty-eight

months

This timely appeal followed.

II
Smith first argues that the district court erred when it
denied his motion to suppress based on violations of the Fourth
Amendment.
people

to

The Fourth Amendment guarantees [t]he right of the

be

secure

in

their
14

persons,

houses,

papers,

and

effects,
Const.

against

amend.

unreasonable

IV.

[T]he

searches

underlying

and

seizures.

command

of

the

U.S.
Fourth

Amendment is always that searches and seizures be reasonable.

Wilson

v.

internal

Arkansas,
quotation

514
marks

U.S.

927,

omitted).

931
In

(1995)

(citation

resolving

and

whether

search or seizure violates the Fourth Amendment, we review the

district courts factual findings for clear error and its legal
conclusions de novo.

United States v. Perkins, 363 F.3d 317,

320 (4th Cir. 2004).

The facts concerning Smiths Fourth Amendment argument are
not in dispute.
Calhoun

of

the

On March 1, 2006, Senior Special Agent Jay

Virginia

Department

of

Alcohol

and

Beverage

Control entered a piece of land in Pittsylvania County owned by

Smith.

He entered the land, which was located approximately

fifty miles from the Halifax Property, without a warrant.

Upon

entry, he saw an unhitched tractor trailer that Agent Calhoun

believed belonged to Smith.
distance

from

structure.

any
(J.A.

The tractor trailer was a good

structure,
318).

hundreds

The

tractor

of

yards

trailer

from
had

any
new

inspection sticker decal with an expiration date of February

2007.

The tractor trailer was locked and closed, but there was

an open gap in the rubber stripping at the right-hand corner of

the tractor trailer.

From outside the tractor trailer, Agent

Calhoun pointed a flashlight in the open gap, enabling him to

15

see that there were liquor jugs inside the tractor trailer.

His

ability to observe the liquor jugs at that time apparently was

impaired

because

pallets

of

liquor

jugs

were

flush

with

the

tractor trailers door, limiting his field of vision.

During the night of March 9, 2006, Agent Calhoun went back
to the tractor trailer, again without a warrant.

This time,

there were wooden pallets outside the tractor trailer.

Because

the door opening was no longer blocked, Agent Calhoun was able
to more fully observe the inside of the tractor trailer.

He

stuck a two-foot carpenters scope through the crack in the

rubber stripping of the tractor trailer and saw some liquor jugs
inside, but they appeared to have been restacked since his March
1 visit.
In

(J.A. 364).
the

district

court,

Smith

raised

Fourth

Amendment

arguments concerning both the March 1 and March 9, 2006 entries

onto his land in Pittsylvania County, as well as the March 9
search

of

the

tractor

these arguments.

trailer.

The

district

court

rejected

Of relevance here, the district court first

held that Agent Calhouns warrantless entries onto Smiths land

did not implicate the Fourth Amendment because Smiths land was
an open field.

Second, the district court held that Agent

Calhouns view of the interior of the tractor trailer with a

flashlight on March 1 was not a Fourth Amendment search because
Agent

Calhoun

did

not

physically
16

enter

the

locked

tractor

trailer.

Third, the district court held that Agent Calhouns

insertion of the carpenters scope into the tractor trailer on

March 9 was a search, but it was justified under the automobile
exception to the Fourth Amendments warrant requirement because
the tractor trailer was a vehicle and Agent Calhoun had probable
cause to believe that it contained evidence of illegal liquor
trafficking.

Fourth,

the

district

court

characterized

any

impact on Smiths Fourth Amendment rights as a result of Agent

Calhouns
district

actions
court

as

de

emphasized

minimis.
that

On

the

this

final

government

point,

the

begun

its

had

video surveillance of the Halifax Property before March 9 and

that the evidence seen on March 9 inside the tractor trailer was
cumulative to the evidence found at the Property on May 12,
2006.
On

appeal,

Smith

first

takes

issue

with

the

district

courts ruling that the Pittsylvania County land constituted an

In Hester v. United States, 265 U.S. 57 (1924),

open field.

the Supreme Court held that the Fourth Amendment does not extend
to open fields.

Id. at 59.

The Courts holding in Hester was

clarified in Oliver v. United States, 466 U.S. 170 (1984).

In

Oliver, the Court held that an individual may not legitimately

demand privacy for activities conducted out of doors in fields,
except

in

curtilage].

the

area

immediately

Id. at 178.

surrounding

the

home

[the

The Court further noted that an open

17

field need be neither open nor a field as those terms are

used in common speech.
nonetheless

may

be

For example . . . a thickly wooded area

an

open

field

as

that

term

is

used

in

Id. at 180 n.11.

construing the Fourth Amendment.

In United States v. Dunn, 480 U.S. 294 (1987), the Supreme

Court

stated

that

fields/curtilage

the

inquiry

critical
is

component

whether

the

area

of

the
harbors

open
the

intimate activity associated with the sanctity of a mans home

Id. at 300 (citation and internal

and the privacies of life.

quotation marks omitted).

The Court in Dunn went on to list

four factors that should be considered in this analysis: the

proximity

of

the

area

claimed

to

be

curtilage

to

the

home,

whether the area is included within an enclosure surrounding the

home, the nature of the uses to which the area is put, and the
steps taken by the resident to protect the area from observation
Id. at 301.

by people passing by.

Applying these factors, it is clear that the district court

did not err when it concluded that the land in Pittsylvania
County was an open field.

There is no evidence that the land

was near the curtilage of a home or that there were any domestic
uses for the land.

In addition, there is no indication in the

record that Smith took meaningful steps to prevent this land

from being observed.
field

and,

The land must be characterized as an open

therefore,

Smith

cannot
18

challenge

either

Agent

Calhouns

March

or

March

9,

2006

entry

onto

his

land

in

Pittsylvania County.
Smith

also

argues

that

Agent

Calhouns

shining

of

the

flashlight into the open gap in the rubber stripping of the

tractor trailer on March 1, 2006 constituted an illegal search. 5
With

regard

to

this

argument,

we

find

no

Fourth

Amendment

violation.
Police officers do not conduct a search under the Fourth
Amendment when, stationed in a place where they have a right to
be, they observe objects in plain view, or use a flashlight to
illuminate the area where the object is located.

See id. at 305

(Here, the officers use of the beam of a flashlight, directed

through the essentially open front of respondents barn, did not
transform their observations into an unreasonable search within
the meaning of the Fourth Amendment.); Texas v. Brown, 460 U.S.
730, 739-40 (1983) (It is likewise beyond dispute that Maples
action in shining his flashlight to illuminate the interior of
Browns car trenched upon no right secured to the latter by the
Fourth Amendment.).

Thus, Agent Calhoun did not search the

The government does not contend that Smith had no

reasonable expectation of privacy in the tractor trailer.
However, we agree with the district court that Smith had such an
expectation of privacy in the tractor trailer.
Cf. United
States v. Wright, 991 F.2d 1182, 1186 (4th Cir. 1993) (holding
that defendant had reasonable expectation of privacy in a barn
in an open field).

19

tractor trailer when, standing outside of it, he pointed his

flashlight
tractor

in

the

trailer,

open
which

gap

in

the

rubber

exposed

the

liquor

stripping
jugs

of

the

inside

the

tractor trailer.
Smiths challenge to Agent Calhouns use of the carpenters
scope on March 9, 2006 is equally without merit.

Initially, we

note that the government concedes that Agent Calhouns use of

the carpenters scope constituted a warrantless search.

See New

York v. Class, 475 U.S. 106, 114-15 (1986) (noting that a search
of an automobile occurs when a police officer physically enters
the automobile).
An established exception to the warrant requirement is the
automobile exception.

United States v. Kelly, 592 F.3d 586,

589 (4th Cir.), cert. denied, 130 S. Ct. 3374 (2010).

Under

this exception, a police officer may search a vehicle without a

warrant

if

probable

cause

exists

to

believe

contraband and the vehicle is readily mobile.

v. Labron, 518 U.S. 938, 940 (1996).

it

contains

Pennsylvania

If both conditions are

met, the police officer may conduct a warrantless search that

is as thorough as a magistrate could authorize in a warrant.
United States v. Ross, 456 U.S. 798, 800 (1982).

Furthermore,

such a search may cover all areas of the vehicle, including any
of its secret compartments.

United States v. Bullock, 94 F.3d

896, 899 (4th Cir. 1996).

20

In California v. Carney, 471 U.S. 386 (1985), the Supreme

Court held that the police did not need a warrant in order to
enter a motor home parked in a public place where probable cause
to search was present.

Id. at 393-94.

The motor home was

capable of functioning as a home; it was stationary; and the

shades were drawn, including one across the front window.
at

388.

Indeed,

the

Court

observed

that

the

motor

possessed some, if not many of the attributes of a home.

Id.
home
Id.

at 393.

Nevertheless, the Court held that it is clear that the

vehicle

falls

clearly

within

the

scope

exception to the warrant requirement.

two

requirements

exception.

for

Id. at 394.

application

Id.
of

of

the

automobile

The Court relied on

the

[automobile]

The first is the ready mobility of

the vehicle, and the second is its presence . . . in a setting

that objectively indicates that the vehicle is being used for
transportation.

Id.

Even though the motor home in Carney was

parked and not being used for transportation at the moment, it

satisfied the second test presumably because it was not located
in a place regularly used for residential purposestemporary or
otherwise.

Id. at 392.

The Court held that the vehicle was

so situated that an objective observer would conclude that it

was being used not as a residence, but as a vehicle.
393.

21

Id. at

Following Carney, courts have applied that case to travel

trailers, see United States v. Ervin, 907 F.2d 1534, 1537 (5th
Cir. 1990) (upholding warrantless search of travel trailer under
the

automobile

States

v.

exception),

Navas,

warrantless

597

search

and

F.3d

of

tractor

492,

498-500

tractor

trailer

trailers,
(2d

see

United

Cir.)

(upholding

the

automobile

under

exception even though cab was not attached to tractor trailer),

cert. denied, 131 S. Ct. 320

(2010).

In Navas, in a thorough opinion, the Second Circuit held

that

the

automobile

exception

applied

to

tractor

trailer

unhitched from its cab, even when the defendants were already
placed under arrest at the time of the search.

Id. at 501.

The

court

mobilitynot

the

reiterated

probability

that

that
it

vehicles

might

actually

inherent
be

set

in

motionis

the

foundation of the [automobile exceptions] mobility rationale.

Id. at 498.

Thus, the mobility rationale . . . does not turn

on case-by-case determinations by agents in the field regarding

either the probability that a vehicle could be mobilized or the
speed with which movement could be achieved.
In

this

case,

the

automobile

Id.

exception

applies

tractor trailer on the land in Pittsylvania County.

to

the

The tractor

trailer clearly was inherently mobile, and counsel for Smith

conceded
moved

by

at

oral

simply

argument
attaching

that
a

the
cab

22

tractor

trailer

to

tractor

the

could

be

trailer.

Moreover, the recent unloading activity at the tractor trailer

suggested that it might be moved when all of the liquor jugs
were unloaded.

In short, embracing Smiths position here would

contravene the sound reasoning of both Carney and Navas.

The

remaining

question

is

whether

Agent

Calhoun

probable cause to conduct the search on March 9, 2006.

cause

exists

where

the

known

facts

and

had

Probable

circumstances

are

sufficient to warrant a [person] of reasonable prudence in the

belief that contraband or evidence of a crime will be found.
Ornelas v. United States, 517 U.S. 690, 696 (1996).

Probable

cause is a commonsense conception that deals with the factual

and practical considerations of everyday life.
at

592

(citation

and

internal

quotation

marks

Kelly, 592 F.3d

omitted).

In

assessing whether probable cause exists, courts must examine

the

facts

from

the

standpoint

of

an

objectively

reasonable

police officer, giving due weight to inferences drawn from those

facts

by

local

law

enforcement

officers.

Id.

(citation,

internal quotation marks, and ellipsis omitted).

At the time Agent Calhoun inserted the carpenters scope
into the tractor trailer, he had probable cause to believe that
evidence

of

illegal

liquor

trafficking

was

in

the

tractor

trailer.

Agent Calhoun knew that liquor jugs are commonly used

to transport illegal liquor; he had seen multiple liquor jugs

inside the tractor trailer on March 1; he heard evidence of
23

illegal
March

liquor

9;

and

manufacturing
he

believed

at

that

the

Halifax

individuals

Property

had

before

unloaded

some

liquor jugs from the tractor trailer between March 1 and March 9
because the liquor jugs had been reconfigured inside the tractor
trailer,

and

there

were

trailer on March 9.
person

to

believe

[would] be found.

loading

pallets

outside

the

tractor

Such facts would lead a reasonably prudent

that

contraband

or

evidence

of

crime

Ornelas, 517 U.S. at 696.

In sum, we hold the district court did not err when it

rejected Smiths Fourth Amendment arguments. 6

III
Next,

Smith

challenges

the

sufficiency

of

the

evidence

supporting his conviction for fraudulent receipt of SSA funds

under 18 U.S.C. 641.

We review challenges to the sufficiency

of the evidence de novo.

440 (4th Cir. 2007).

United States v. Kelly, 510 F.3d 433,

A defendant challenging the sufficiency

of the evidence to support his conviction bears a heavy burden.

United States v. Beidler, 110 F.3d 1064, 1067 (4th Cir. 1997)
(citation and internal quotation marks omitted).

We will uphold

a jurys verdict if, viewing the evidence in the light most

6

In light of this holding, we need not address the district

courts conclusion that any impact on Smiths Fourth Amendment
rights as a result of Agent Calhouns actions was de minimis.

24

favorable

to

evidence.
2008).

the

government,

it

is

supported

by

substantial

United States v. Reid, 523 F.3d 310, 317 (4th Cir.

Substantial evidence is present if a reasonable finder

of fact could accept [the evidence] as adequate and sufficient

to

support

conclusion

of

defendants

guilt

beyond

United States v. Burgos, 94 F.3d 849, 862

reasonable doubt.

(4th Cir. 1996) (en banc).

[W]e do not weigh the evidence or

assess the credibility of witnesses, but assume that the jury

resolved any discrepancies in favor of the government.

Kelly,

510 F.3d at 440.

To

be

convicted

under

641,

the

government

must

prove

beyond a reasonable doubt that: (1) the money described in the

indictment belonged to the United States or an agency thereof;
(2) the defendant stole, fraudulently received, or converted the
money to his own use; and (3) the defendant did so knowingly
with intent to deprive the government of the money.
States v. McRee, 7 F.3d 976, 980 (11th Cir. 1993).

United

With respect

to the intent element, the defendant must know that his taking
of property is an unlawful conversion.
States,
requires

342

U.S.

more

246,

than

27071

knowledge

property into his possession.

(1952).
that

Morissette v. United
[K]nowing

defendant

was

conversion
taking

the

He must have had knowledge of the

facts, though not necessarily the law, that made the taking a
conversion.

Id.
25

At

trial,

the

government

firmly

established

that

Smith

violated 641 because he worked while collecting SSA disability

insurance payments based on his fraudulent claim that he could
not

work

because

he

was

disabled.

Smith

was

informed,

and

therefore knew, that he was supposed to notify the SSA if his

condition improved or he returned to work.

Not only did Smith

fail to notify the SSA that he was working at his illegal liquor
business,
working.

but

he

also

falsely

told

Watkins

that

he

was

not

Such evidence is sufficient to support his conviction. 7

IV
Finally,

Smith

challenges

his

sentence.

We

review

sentence imposed by the district court under the deferential

abuse-of-discretion standard, regardless of whether the sentence
imposed is inside, just outside, or significantly outside the

Smith argues that there is insufficient evidence to prove

that he performed trial work beyond the trial work permitted
under 20 C.F.R. 404.1592(a), and, thus, his 641 conviction
cannot stand. We reject this argument because it is premised on
a view of the facts that the jury obviously rejected; that is,
that Smith only was involved in the illegal liquor operation for
a nine-month period. Moreover, Watkins testified that, even if
Smith was given the benefit of a trial work period, he still was
overpaid more than $10,000.00. Finally, Smith fails to cite any
authority, and we could find none, suggesting that a recipient
of disability insurance benefits is not required to notify the
SSA under 20 C.F.R. 404.1588 during a trial work period if his
condition improves, he returns to work, or he increases the
amount of his work.

26

Guidelines range.

United States v. Evans, 526 F.3d 155, 161

(4th Cir. 2008); see also Gall v. United States, 552 U.S. 38, 41
(2007).

The first step in this review requires us to inspect

the record for procedural reasonableness by ensuring that the

district court committed no significant procedural errors, such
as failing to calculate or improperly calculating the Guidelines
range, failing to consider the 18 U.S.C. 3553(a) factors, or
failing to adequately explain the sentence.
Boulware, 604 F.3d 832, 83738 (4th Cir. 2010).

United States v.
The second step

requires us to consider the substantive reasonableness of the

sentence

imposed,

circumstances.

taking

into

account

the

totality

of

the

Gall, 552 U.S. at 51.

On April 14, 2009, at the governments urging, the district

court held a sentencing hearing to determine the tax loss.

Such

determination was critical because the tax loss would establish

Smiths base offense level under 2T2.1 of the United States
Sentencing

Guidelines

(USSG).

Robert

Kehoe,

an

investigator

with the TTB, was the only witness who testified at the hearing.
Investigator Kehoe prepared three tax loss estimates: (1)
$217,795.50; (2) $320,045.85; and (3) $555,984.00.

The tax loss

estimates were based in part on the trial evidence, Investigator

27

Kehoes professional experience, and an Alcohol Yield Formula

(AYF). 8

(J.A. 1385).

Investigator Kehoes maximum loss estimate assumed that the

still on the Halifax Property functioned at full capacity from
November

2004

to

May

2006,

and

relied

on

Johnsons

trial

testimony that the still used 4,400 pounds of sugar for each
weekly run.

Application of the AYF yielded 41,184 proof gallons

of distilled spirits and a tax liability of $555,984.00.

Investigator Kehoes middle loss estimate was based on the
conclusion
sugar

from

that

Smith

other

stills operation.
that

the

obtained

sources

an

during

(J.A. 1388).

significant

undocumented

reductions

middle

quantity

period

of

of
the

Investigator Kehoe reasoned

in

Smiths

sugar

purchases

during this middle period, when compared to other evidence that

the still was operating in high gear during this same period,
only could be explained by concluding that Smith was obtaining
sugar from another sources.

Investigator Kehoes application of

the AYF to the middle loss estimate yielded 182,362 pounds of

sugar,

23,707.10

proof

gallons

of

distilled

spirits,

and

$320,045.85 of tax loss.

8

The AYF is a formula used for determining the alcohol

yield of sugar used in illegal liquor operations. The average
yield is 13 proof gallons of alcohol per each 100 pounds of
sugar.
(J.A.
1385).
Smith
does
not
challenge
the
reasonableness of the AYF.

28

Investigator Kehoes minimum loss estimate was based on the

documented sugar purchases between November 2004 and May 2006
from William R. Hill & Company.

Application of the AYF to the

known 124,100 pounds of sugar purchased yielded 16,133 proof

gallons of distilled spirits and a tax loss of $217,795.50.
Following

the

hearing,

the

district

court

accepted

Investigator Kehoes minimum tax loss estimate of $217,795.50

because it was based on the sugar purchase records admitted at
trial and utilized a reliable methodology to determine the tax
loss.

The

district

court

also

concluded

that

the

AYF

was

reasonable given the lack of records of the actual distilled

spirits

produced.

The

district

court

rejected

Investigator

Kehoes maximum estimate because it was unrealistic to assume

that the still was always operating at maximum capacity, and
rejected Investigator Kehoes middle estimate because it was not
based on documented sugar purchases.
Consistent with the district courts ruling on the tax loss
issue, a Presentence Investigation Report (PSR) was prepared by
a United States Probation Officer.

Because the tax loss was

more than $200,000.00 and no more than $400,000.00, Smiths base

offense level was 18, USSG 2T4.1(G).
was

increased

offense,
3C1.1.

id.

four

levels

3B1.1(a),

for
and

his
two

His base offense level

leadership

levels

for

role

in

the

perjury,

id.

Smiths total offense level of 24, coupled with a

29

Criminal History Category of I, produced a sentencing range of

51 to 63 months imprisonment.
At

sentencing,

the

district

findings and recommendations.

district

court

concerning

the

heard

from

appropriate

court

adopted

the

PSRs

Prior to imposing sentence, the

counsel,

as

sentence.

well
After

as

from

Smith,

considering

the

advisory sentencing range, as well as the factors set forth in

18

U.S.C.

3553(a),

the

district

court

sentenced

Smith

to

forty-eight months imprisonment due to his age and physical

condition.
Smiths

challenge

to

the

district

courts

tax

loss

calculation is premised on the argument that it was procedurally

unreasonable for the district court to base its calculation on
the

documented

Company.

purchases

of

sugar

from

R.

Hill

&

Smith posits that there was no evidence that Smith

purchased any sugar from the company.

loss

William

calculation

should

have

been

based

Consequently, the tax

on

the

known

liquor

purchases made by Taylorapproximately 3,000 gallons of liquor.

USSG 2T2.1 provides that the tax loss is the amount of
taxes that the taxpayer failed to pay or attempted not to pay.
USSG 2T2.1(a).

The base offense level for USSG 2T2.1 is

calculated by reference to the Tax Table in USSG 2T4.1.

2T2.1(a).

USSG

Under the Guidelines, the tax loss is determined

by the same rules applicable in determining any other sentencing

30

factor.

USSG 2T1.1, comment. (n.1).

In some instances,

such as when indirect methods of proof are used, the amount of

the tax loss may be uncertain; the guidelines contemplate that
the court will simply make a reasonable estimate based on the
available facts.

Id.; see also id. 6A1.3(a) (noting that the

district court may consider relevant information without regard

to its admissibility under the rules of evidence applicable at
trial, provided that the information has sufficient indicia of
reliability to support its probable accuracy).
district

courts

calculation

concerning

finding reviewed for clear error.

loss

In general, the
is

factual

United States v. Loayza, 107

F.3d 257, 265 (4th Cir. 1997).

The

district

$217,795.50

is

courts

not

finding

clearly

that

erroneous.

the

tax

loss

The

district

was
court

reasonably relied on the records of sugar purchases and the AYF

to determine the amount of untaxed liquor produced by the still
because detailed records of Smiths actual production amounts
were unavailable.

Moreover, the district court was at liberty

to

contention

reject

illegal

Smiths

liquor

circumstantial

prior
evidence

to

that

the

November

still

2005

demonstrating

by

that

did

not

produce

crediting
Smith

the

actively

participated in the conspiracy during the time alleged and went

to great lengths to mask his participation in the conspiracy and
his relationship to the Halifax Property.
31

The district court

took the most conservative view of the evidence in accepting

Investigator Kehoes lowest tax loss estimate, and we cannot
take issue with this prudent approach in calculating the tax
loss.

V
For the reasons stated herein, the judgment of the district
court is affirmed.
AFFIRMED

32